MUMBAI, Sept 8: The rupee fell 18 paise to close at 94.74 against the American currency on Tuesday as geopolitical tensions in West Asia and rising Brent crude prices nearing USD 99 per barrel weighed on investor sentiment. Forex traders said the Indian rupee declined on a surge in crude oil prices amid fresh attacks on Aramco's facilities by Yemen's Houthis. Moreover, rising geopolitical tensions in West Asia and a weak trend in domestic equities further pressured the rupee.
At the interbank foreign exchange market, the rupee opened at 94.49 against the US dollar. The local unit touched an intraday high of 94.49 and a low of 94.89. The rupee finally settled at 94.74, down 18 paise from its previous close.
On Monday, the rupee fell 13 paise to close at 94.56 against the American currency.
"After remaining unchanged for two consecutive sessions, the rupee fell sharply amid persistent risk-off sentiment and higher oil prices, as aggressive dollar buying outstripped liquidity. The ongoing geopolitical worries and a lack of supportive FII inflows amplified the decline, while market participants keep a cautious eye on upcoming domestic inflation data and major central bank policy decision," Dilip Parmar, Senior Research Analyst, HDFC Securities, said.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 98.96, lower by 0.21 per cent. Brent crude, the global oil benchmark, was trading higher by 1.39 per cent at USD 98.35 per barrel in futures trade. According to forex traders, elevated crude oil prices, with Brent remaining near the USD 97 per barrel mark, along with the absence of any significant resolution to ongoing geopolitical uncertainties, kept investor sentiment cautious.
"We expect the rupee to trade with a slight negative bias on escalation of tensions in the Middle East and worries over rising crude oil prices. Risk aversion in global markets may also pressurise the rupee.
"However, a weak dollar and foreign inflows may support the rupee at lower levels. Investors may now focus on inflation data from the US and India. USDINR spot price is expected to trade in a range of 94.60 to 95.10," Anuj Choudhary, Research Analyst, Mirae Asset ShareKhan, said. |
